Tabcorp profit has surged more than 12-fold to $362.5 million in the gambling giant’s first full-year of combined operations with the Tatts Group.
The betting behemoth lifted revenue by 46 per cent to $5.5 billion in the 12 months to June 30, with its biggest business, lotteries and keno, hitting a record $2.86 billion revenue on what it said was a string of favourable jackpots ins Powerball, Oz Lotto and Lucky Lotteries.
This more than offset a weaker performance by the company’s wagering and media business, which is in the first year of a three-year integration that includes 1,300 UBET retail venues in Queensland, Tasmania, SA and NT to TAB.
Wagering and media revenues rose 9.0 per cent to $2.3 billion on a statutory basis but were down 3.6 per cent on a pro-forma basis if the Tatts merger had been in place for FY18.
Nonetheless, chief executive David Attenborough said the first full year of the Tabcorp-Tatts combination proved the benefits of the merger.
“Our businesses have a clear set of priorities to build on their competitive advantages and drive long-term profitable growth,” Mr Attenborough said.
Tabcorp lifted its final dividend by 1.0 cents to 11 cents per share, fully franked, for a total dividend of 22 cents.
The company said its integration with Tatts had delivered $64 million in earnings from savings and business improvements, exceeding the company’s revised midyear target of $55 million.
The majority of integration activities are expected to be completed by the end of FY20, with the company maintaining a target of between $130 million and $145 million in savings in FY21, as announced in February.
Tabcorp’s results included a $25.3 million after tax expense, with compensation from Queensland’s new point of consumption tax was more than offset by $24.1 million in implementation costs, and $11.8 million in arrangement costs to Racing Queensland.
An extra $20 million after-tax expense could flow if Queensland’s racing body is successful in arguing that UBET underpaid fees following the new tax.
The matter is before the state’s Supreme Court, with Tabcorp and UBET telling shareholders that, on the balance of probability, no further provision is required.
Shares in the company dipped and dived at Wednesday’s open and were trading 0.23 per cent lower at $4.36 by 1050 AEST.